Lord Walker of Aldringham—General Sir Michael John Dawson Walker, GCB, CMG, CBE, having been created Baron Walker of Aldringham, of Aldringham in the County of Suffolk, for life—Was, in his robes, introduced between the Lord Glenarthur and the Lord Boyce.

Lord Falconer of Thoroton: My Lords, Parliament debated the question whether we should have a Supreme Court and the matter was passed by both Houses. Instead of seeking to redebate an issue on which Parliament has made a firm decision, we should work together to get the best possible Supreme Court. As for the costs, civil litigation charges fees and some of those fees will contribute to part of the costs.

Lord Falconer of Thoroton: My Lords, we are very conscious of the importance of the interiors of the Middlesex Guildhall and, in particular, the court furniture, which my noble friend rightly identifies as being among the best of its kind. Before the local authority gave planning permission it was extremely concerned that appropriate homes should be found for the exquisite court furniture. That has been done—and only once it had been done was final planning permission given.
	As to what the building will look like after it has been completed and the interiors have been done, I very much recommend to noble Lords to look at the work done by Feilden and Mawson and see its extremely high quality. Although there is exquisite court furniture in Middlesex Guildhall, it might be said not to be looking at its best on the inside if noble Lords were to visit it now.

Lord Howe of Aberavon: My Lords, is the noble and learned Lord aware that in the most recent accounts of the House, the costs recorded of the traditional activities in the House, excluding Law Lords' salaries, were less than £200,000 for the year and that the capital costs, let alone the interest costs, for the Middlesex Guildhall will be 12 or 15 times higher than that? Are not the costs of this House, as the report of accounts state,
	"outside HM Treasury's administration costs control regime",
	whereas the costs that will be incurred in the new premises will be much more closely supervised by the Treasury? Therefore, apart from being higher, are they not likely to generate even higher charges for litigants who go to the court?

Lord Falconer of Thoroton: My Lords, no, I disagree with that entirely. Since 1997, expenditure on the Crown Courts, according to an independent survey, has increased by 116 per cent. In order to accommodate the fact that there will no longer be seven courts at Middlesex Guildhall, additional courts are to be built at Isleworth. The one group that will not suffer are the Crown Courts.

Lord Davies of Oldham: My Lords, the right reverend Prelate makes an important contribution. As he will recognise, however, we have a great deal of work to do before we are able to establish a commercially viable technology. As I indicated, at least nine major, well resourced companies are pursuing various potential strategies on this work. The Government are investing their own £35 million for effective development to demonstrate confidence and to establish confidence in private industry that the huge investment necessary will produce the required results. What that would do for British coalfields, whether deep mine or open-cast, is bound to be marginal in comparison with future coal burning in our power stations.

Lord Greaves: My Lords, I thank the Minister for that Answer. I am glad that his figure is more or less the same as mine. We are talking about activities such as walking in the mountains, swimming in the sea, rambles in local country parks, cycling along lanes, bird-watching and many related activities. They might be classed as informal countryside recreation, which, by and large, people undertake with friends or family or on their own, and not in an organised way. The Minister suggested that the Government regard such activity as high priority. Should it should not be a higher priority, given the potential for growth that it offers through its impact both on the economy and on the health of the people of this country?

Lord Davies of Oldham: My Lords, my impression is that it is not Governments that keep footpaths open. Governments can commit the countryside to be available to the nation, as we did with the right to roam in the Act that we passed a few years ago. It is the voluntary activity and insistence of meritorious organisations such as the Ramblers Association that keeps footpaths open and available to the public.

Baroness Amos: My Lords, the noble Lord's last point demonstrates the difficulty experienced by the international community, including the Security Council, in implementing the whole Responsibility to Protect agenda, which was such an important part of the UN decision-making process. I that think we all recognise that.
	Access is difficult. In July last year, half a million people did not have access to humanitarian supplies because of the difficult situation, whereas the number of people affected in January this year has so far been some 70,000, although we think that that figure will rise. I can say to the House that nutrition and health indicators have remained relatively stable so far, but we have to watch this situation because it will become critical if the inaccessibility continues.

Lord Howell of Guildford: My Lords, on that last point, has the Lord President noted that some of the thousands of refugees being pushed into Chad are reported to have hideous diseases, including leprosy and many other appalling conditions? Does she accept, when she talks about calling on all sides, that the roots of the constant murdering by Arab nomads of the people of the Darfur region lie in quarrels over resources, particularly over oil and the Chinese investment in and development of oil, which it is taking out of Sudan? Will she be sure that "all sides" includes a sensible and close discussion with the Chinese so that they take some responsibility for the impact and consequences of their moves right over Africa, particularly in Sudan, in developing oil and local resources? Those actions are having repercussions, which is leading to murder on a massive scale.

Baroness Amos: My Lords, I agree that many of the conflicts, in particular the conflict in Darfur and more widely in Sudan, are to do with access to resources, but they are also to do with inter-ethnic fighting and other issues. The noble Lord will know that are we talking to the Chinese not only in the context of their role on the Security Council but more generally on the role that they are playing across the African continent as a whole. We are aiming to work with the Chinese to ensure that there is sustainable development on the continent, and they have a responsibility in ensuring that that happens.

Lord Avebury: My Lords, considering the gross obstruction to the UN humanitarian agencies as well as the resumption of bombing attacks on civilians and the refusal of Khartoum to co-operate in the delivery of the life support package, does the noble Baroness agree that it is time to refer the matter again to the United Nations so that it can revisit Resolution 1706 and ensure that we do not face an overwhelming humanitarian disaster in Darfur?

Lord Campbell of Alloway: In moving Amendment No. 52 I shall speak also to Amendment No. 139F and, by leave, refer to Amendment No. 65. I thank my noble friend Lord Hunt of Wirral, with whom I had the privilege to serve on the Joint Committee, for his support. In every sense of the word, these are probing amendments.

Lord Campbell of Alloway: Yes, but I have to refer to it as relevant. I have had a word with the noble Lord. Thank you very much. Amendment No. 139F would subsume Amendment No. 52 because it is applicable only to directions from the LSB under Clause 31. The situation has changed overnight. My noble friend Lord Kingsland raised the issue of judicial review at Second Reading but there was no response to his question. Yesterday, at about three o'clock, I said:
	"as matters stand, it"—
	the LSB—
	"appears to have ... absolute discretion, without means of ultimate judicial resolution".—[Official Report, 22/1/07; col. 898.]
	At 10 o'clock it was accepted that the LSB was subject to judicial review, a concession for which I am indeed grateful, so I scrapped my speaking notes. Today, therefore, the question that arises is whether that concession should be in the Bill. Should it be in Amendment No. 139F or Amendment No. 65 or in neither? I am not speaking to the amendment, but merely referring to the dilemma. We now have to address that issue. If that is so, in what form should that amendment be?
	This is not just a situation in which we can sit back and rely on Pepper v Hart, which is a source of last relief. As appears from yesterday's debate on the framework within which the LSB operates, it is not at all clear and clarity is highly relevant to judicial review. We must therefore consider, in summary, what we are dealing with. Today, we are in effect dealing with a continuation of what happened yesterday. It was proposed that the structure of the Bill should define the perimeter within which the LSB should exercise its discretion; that the integrity of the approved regulators be acknowledged in the Bill; and that the quality and standards of legal services be maintained, as set by self-regulation, and recognised in the Bill. It was also proposed that a fair balance between the interests of the consumer and the approved regulator be assured; that the LSB should only intervene on the complaint of the consumer after notice has been given to the approved regulator to enable representation; that some acceptable means to that end should be devised; and that the conflict between the regulatory objectives was to be resolved proportionately, taking into account all such obligations of like importance on a balance, if fine, to be tipped in favour of public interest, as spoken to on Clause 1.
	That could be achieved by a series of piecemeal amendments, or by a trigger clause in primary legislation, requiring the Secretary of State to introduce regulations enabling him to issue and require a code of practice, having full legal efficacy in the civil field, as spoken to by Lord Denning, Lord Elwyn-Jones and Lord Henderson of Brompton, the noble and learned Lord, Lord Cameron of Lochbroom, and other noble Lords in a short debate on 15 January 1986, cols. 1075 to 1104. Such a code could assimilate merely procedural provisions without eroding or overloading the structure of the primary legislation.
	I do not know how this is to be resolved. It could be a "multi-approach": some of the procedural provisions could be dealt with in the code, having legal effect; some provisions would essentially have to remain in the Bill. I cannot entertain how that should be done; in fact, I do not know. It is a difficult matter to resolve, but I do know that it must be done.
	If the Government were to accept Amendment No. 65, then, subject to the advice of my noble friends Lord Kingsland and Lord Hunt of Wirral, one would have to consider whether these judicial review amendments would be required in the amended Bill, or whether they would be otiose, as the principle would have been accepted.
	I do not wish to take much more time, but I shall conclude with a word to seek to alleviate the concern of the noble Lord, Lord Whitty, who I am glad to see in his place. I have the greatest possible respect for him, and I have disagreed with him on too many occasions. With respect, the noble Lord seems to be unaware that consumer interests can be contrary to public interests and that if they are, as was explained by the noble and learned Baroness, Lady Butler-Sloss, they must be subservient to the public interest. That is the first concept that I ask the noble Lord to consider. The noble Lord does not seem to be aware that it is in the interests of the consumer that the quality and independence of legal services set up and maintained by self-regulation should remain as proposed in yesterday's debate. I hope that, as chairman of the National Consumer Council, the noble Lord will accept that what he said about limiting the potential for intervention cannot and does not affect judgment on the gravity of a complaint from the council about the conduct of the Law Society, which is only one of the approved regulators. I say nothing about the Bar Council because I have too close an interest to declare. The noble Lord, Lord Whitty, entertains a serious misconception. As chairman of the organisation, I respectfully ask him to reconsider his position. I beg to move.

Baroness Ashton of Upholland: I take the view that public bodies operate in a way means that there is a right of judicial review. I was seeking to deal with the detail of the points made by the noble Lord, Lord Campbell of Alloway, by going through them line by line and addressing where judicial review would apply. The noble Lord, Lord Hunt, is a lawyer and I am not, but one thing I know for sure about legislation is that it is always difficult to set out all the circumstances that might apply when one makes application to the court. Indeed, in other parts of our legislative duty, the noble Lord and I would probably argue in opposite directions because it is important that we do not curb the rights of those who are entitled to judicial review. I have sought to explain that, in our view, that would be inappropriate. The right of judicial review is there because the board is a public body. It is an appropriate remedy if people believe that there has been unreasonable behaviour or seek judicial review for other reasons. But to say that it is available on these or other grounds would curb something inappropriately.
	The noble Lord, Lord Kingsland, very reasonably said that you can lodge an appeal later. Although we will come to the detail of that, it is reasonable for him to ask a general question. We have established that judicial review is available. However, the fining power within the Bill is, we believe, a stronger power. Noble Lords and those who are being regulated may also feel that it is stronger, more definitive and has potentially greater and far-reaching consequences. We therefore wanted to add the ability to go to appeal specifically around that power. So we did so, by saying that there would be leave to go to the High Court to appeal on that power.
	In order to ensure that we did not end up in a situation where someone could appeal on that and have a judicial review, the ouster clause simply says, "If you're doing that, you can't have the judicial review as well because you already have the right to appeal". That is what it is for. The purpose of the measure is to provide a judicial review in general and an appeal specifically around fining, but if there is an appeal around fining there is no need for a judicial review as well. The ouster clause therefore says that you cannot do both. That is what this part of the Bill seeks to do.

Lord Campbell of Alloway: I draw the attention of the noble Lord, Lord Kingsland, to Amendment No. 79. I know that it has to do with licensing, but it could have to do with anything else:
	"The Secretary of State may, by order ... establish a body to hear and determine appeals from decisions, made by a person specified in the order in the person's capacity as a licensing authority".
	Does my noble friend really think that for the Secretary of State to appoint a body of persons, unspecified and at his discretion, to deal with and determine appeal, is at all appropriate machinery? I would just like to know whether my noble friend has any ideas about it.

Baroness Ashton of Upholland: I read out exactly what the noble and learned Lord read out in Clause 3(3). I agree with him that the board should operate on those principles. I have made the Government's position clear: the Legal Services Board should make its decisions based on those principles of proportionality, transparency and so on, and there are opportunities for bodies to come forward with their views within the framework we have identified. On the amendment of the noble Lord, Lord Thomas of Gresford, 28 days would be available to make those representations on public censure. If the body felt that it had been treated in an unreasonable manner, or processes were not appropriately followed, they would have the remedy of judicial review available to them because the board is a public body.
	To create a situation where every attempt by the Legal Services Board to use its powers would be open to an automatic right to go to the High Court is not the right way forward. It is more appropriate for bodies who feel that the board has genuinely treated them badly to apply to the courts for leave for judicial review. The courts would look at the circumstances and, I have no doubt, if appropriate, allow it. Financial penalties must be looked at in a distinctly separate way.
	There is a straightforward difference between us. We have covered this appropriately. I am happy to talk about it further outside your Lordships' House, and to the noble Lord, Lord Campbell of Alloway, to explain that. To enable bodies to be treated properly and appropriately, however, is the right course of action. The safeguards are exactly as the noble and learned Lord, Lord Lyell, has said: the way in which the board is required to act ensures that it does so appropriately. I go back to my point in answer to the noble Lord, Lord Hunt, who is no longer in his place: it is ultimately a supervisory body that is able to take decisions, acting appropriately, in circumstances where it must.
	I was not thinking of the big stick when I thought of the rap on the knuckles. I was trying to say that I hope that they do not use these powers. Ultimately, however, the function this regulator has been created to perform includes being able to act on our behalf if it needs to. That must be a part of the legislation.

Baroness Ashton of Upholland: I feel compelled to join this conversation. It is important to describe the power and the approach we have taken. I completely accept that it is important for the front-line regulators and the supervisory regulator to have a strong relationship of mutual respect through working closely together. But I would not go as far as the noble Lord, Lord Hunt of Wirral, in describing them as one regulator to another, putting them on the same pegging. There is a difference between the supervisor and those being supervised.
	I agree that differences should be resolved by agreement where possible. My noble friend Lord Whitty, the noble Lords, Lord Campbell of Alloway, Lord Maclennan of Rogart, Lord Kingsland, and all Members of the Committee who have spoken in this debate would agree with that. We also know that that may happen in most circumstances but not in all. Whereas the noble Lord, Lord Hunt of Wirral, was concerned that we have put a lot of structure in the Bill, in my view, the clearer we are about what is available to the Legal Services Board, the better for all concerned. Clarity about the powers is important; then everyone knows what is available and what could happen. That is fair and proper.
	Committee Members were concerned that this was an unusual power, but they will know that the Financial Services Authority and Ofgem also have that power and, as my noble friend Lord Whitty said, the Legal Services Complaints Commissioner currently has the power. Much was made of the Council for Healthcare Regulatory Excellence, so I took the opportunity to look up the functions of CHRE, which are very different from the type of body that we are describing, so the comparison does not work effectively. The CHRE promotes the interests of patients and best practice, reports annually to Parliament, promotes co-operation and consistency, develops principles of good regulation and advises Ministers. They are very important objectives, but different from the case before us. Therefore, my first proposition is that the power to fine is available in a regulatory framework and should be clearly available in these particular circumstances.
	Having said that, I understand to a degree the concerns raised about how that power is exercised. We have talked a lot already today and yesterday about Clause 3(3) and both the noble and learned Lord, Lord Lyell, and I recorded that subsection in Hansard so I will desist from repeating it. But the noble Lord, Lord Kingsland, seeks to go further by constraining the circumstances in which that power could be exercised, specifically in Amendment No. 61. To remind ourselves of that, the noble Lord proposes that the power should be restricted to where the LSB has first issued a direction to an approved regulator under Clause 31 and,
	"the approved regulator has failed to comply with",
	that direction.
	I understand the intention to ensure that there is a clear indication of what the Legal Services Board sees as a failure. I also understand that the need for assurance is particularly relevant where the approved regulator may, as the noble Lord said in his opening remarks, have separated the regulatory and representative functions we require under Clause 29, and as such, does not have direct control over the exercise of regulatory functions by its regulatory arm. I have some sympathy with the Committee about that.
	However, I remain concerned that where the regulators do have control over matters it might be appropriate for the LSB to be able to fine without first issuing directions. I am making a distinction in my mind between those matters over which the regulator has direct control and those over which it does not. In particular, one might say that, as in Clause 29, the proper separation of the functions of regulatory and representative functions and the proper resourcing of regulatory arms are clearly a direct responsibility of the approved regulator. That is where it might be appropriate to move to a fine if that is the right thing to do.
	In Amendment No. 62 the noble Lord, Lord Kingsland, is trying to further restrict the use of the power to fine to situations in which the LSB is satisfied that the matter cannot be adequately addressed by use of any of the other powers available to it—such as the setting of performance targets, issuing a direction or a statement of public censure, if I dare mention that last point. I understand what the noble Lord seeks to achieve. Indeed, it is best practice for a regulator to be satisfied that any sanction that it seeks to apply is appropriate. Again, Clause 3 provides for that and I would expect the board to take full account of it. But I am not persuaded to go as far as the noble Lord wishes me to go under Amendment No. 62, by putting such a responsibility in the Bill, as I do not want to fetter the LSB to exercise effective oversight regulation as completely as the amendment would do. While I accept that it is a condition in respect of an intervention directions and deauthorisation, these are more serious and intrusive powers. Therefore, we do not consider the same threshold should apply to the power to fine.
	But I should like to look at these points again and, in particular, the points that the noble Lord, Lord Kingsland, raised under Amendment No. 61 in the manner that I described—which is about the ability of the regulator to have direct control over particular issues and whether, when that is not available, those circumstances dictate that a direction might be appropriate first. So if the noble Lord agrees I shall take away Amendments Nos. 61 and 62. I have made it clear that I do not want to go as far as Amendment No. 62 at this point, but I am interested in what the noble Lord seeks to do, at least in part, under Amendment No. 61, without taking away the power to fine which is important and already available in other forms of regulatory regime. We want to have that capacity available but we may need to think a little further to be clear about situations in which there is no direct control. I hope that noble Lords will accept my willingness to do that and to come back with my further thoughts on that.

Lord Maclennan of Rogart: I am grateful to the noble Baroness for her reply to the debate in which I did not participate. Some of what I wanted to raise might have been better raised on the Question whether the clause stand part. The provisions of Clause 48 impose a mandatory duty on the board to issue statements of policy in seven particular respects. That could create a whole apparatus of guidance that goes far beyond the exercise of discretion to intervene where there is a perceived weakness in the existing regulatory provision. It appears that the board is being invited to do what the noble Baroness herself is clearly and sensibly reluctant to do, which is to spell out the circumstances in which these various powers may be exercised. If that happens, arguments will be made by the regulator about whether the supervision by the Legal Services Board gave no indication about the circumstances that arose in the policy statement.
	In itself, that is suggestive of a very wide-ranging and detailed role, which I suspect is not necessary. Clearly, it is sensible for the supervisory board to have an interchange of ideas and considerations with the appointed regulators, but this is much more. This is almost the statute book being issued by the supervisory board—by the Legal Services Board. The power to issue not just simple guidance when the Legal Services Board considers it necessary, but a duty to issue statements of policy right across the board in this way, is a very heavy burden indeed. I hesitate to reuse the word that I used, which caused some eyebrows to be raised in an earlier debate—incubus—but that is how it strikes me.
	The motivation behind the amendment seems to me quite a helpful indication that these policy statements should not have that encyclopaedic nature; they should not necessarily be regarded as all-encompassing. They are there as an aid to the Legal Services Board and are not intended to be used, save in the very limited way that it thinks is appropriate.

Baroness Ashton of Upholland: My position is that, yesterday and today, I agreed to look at whether we have a correct explanation, a correct approach to setting out the role of the supervisory regulator, the model B plus. If, on reflection, having reread our debates and having discussed the matter with noble Lords, more needs to be done, I feel comfortable in saying that I shall see whether I need to bring something forward. I hesitate to say that I will bring something forward now, partly because I do not have policy responsibility and partly because I need to reflect on all these discussions, as a number of issues have been raised that I need to think about.

Lord Maclennan of Rogart: I take this opportunity to acknowledge with gratitude the reply to the earlier amendment dealing with some points which might have been better raised in this debate. The obligation on the board to prepare and issue statements of policy with respect to the exercise of its functions under Sections 30, 31, 34, 36, 40, 45 and 75 does not suggest a light touch. Furthermore, it is exceedingly difficult to engage with what must be included in some of these policy statements—such as, in subsection (3)(a), the extent to which a penalty is being imposed with regard to the deliberation or recklessness of the action of the frontline regulator—in the hypothetical circumstances which might arise.
	This clause militates against the Government's argument that it is intended that the role be exercised with a light touch. The board is being given almost legislative functions. They are described as policy statements, but they are clearly intended to guide and be relied on by others in the front line. I cannot see this being accomplished without a massive bureaucracy in support. What goes into and is left out of those statements will require very careful consideration. What goes in will be more than an indication; it will be taken as a rule. What is left out will be regarded as secondary. If there is an issue between the two bodies—the front-line regulator and the Legal Services Board—the absence of a reference to it in the policy statement will militate in favour of it being regarded as something that was not of such importance. That may therefore diminish the effectiveness of the Legal Services Board.
	The clause is quite troubling. I hope that, in reviewing the matters raised under the previous amendment, the Minister will give some thought to perhaps articulating how these statements of policy are to be prepared and what their role might be and what they are anticipated to encompass.

Lord Kingsland: Amendments Nos. 106 and 148 derive from concerns raised with the Opposition by the trade mark and patent attorneys. These amendments seek to keep practising fees separate from a regulator's other assets. As I understand it, the logic is that, while there are severe restrictions on the positive use of fee income or enjoyment of profit, the liability for the levy to the Legal Services Board appears to extend to all a regulator's assets, including its non-regulatory business. The view of the trade mark and patent attorneys is that it is inequitable that a regulator and its owners should bear the burden, but not the benefit, of regulatory activity. Thus, Amendment No. 106 proposes that a regulator's income should be ring-fenced, while Amendment No. 148 suggests that recovery of the board's levy as a debt should be limited to the regulatory income of the regulator.
	The Institute of Trade Mark Attorneys provides an illustration of the problems that could arise in recovering the levy. It is a private body limited by guarantee that performs regulatory and non-regulatory functions. If the levy can be recovered against all its assets, that would mean that the assets of the business, including income and capital assets derived from non-regulatory and representative sources, are vulnerable, even though, as a regulator, the institute and its members are precluded by Clause 50(2) from realising any financial benefit from any regulatory activity. The result is that private persons or businesses are expected to guarantee a levy to the state with no possibility of a corresponding benefit in return. Therefore, it is argued that it is only reasonable that the recovery of the levy should be limited to funds ring-fenced by the proposed subsection in Amendment No. 148. I beg to move.

Lord Kingsland: The previous amendment was inspired by the trade mark and patent attorneys; this amendment has been brought to my attention by the Institute of Chartered Accountants.
	The motivation for the amendment comes from the interests of regulators who operate outside the legal services area. The issue is, as I understand it, that there is no mechanism for dialogue between approved regulators and external regulators such as, for example, the Financial Services Authority or the Institute of Chartered Accountants. This is already an important point in a situation, for example, where an accountant is employed by a law firm. Following this legislation it will become doubly so because of the creation of the new alternative business structure regime, where there will inevitably be more interaction between the various professions.
	The problem, as I understand it, is that the Bill as currently drafted allows an affected person—in other words, a licensed individual or a firm—to make an application to the board in the case of regulatory conflict. There is a similar capability between the various approved regulators on the same ground. But the Bill does not allow any mechanism whatever for an external regulatory body as defined in the Bill to address the problem of conflicting regulation. We believe there should be the means for such a dialogue to take place. That is the background to the amendments.
	Amendment No. 106B would allow an external regulatory body to approach other approved regulators, while the amendments to Clause 67 address the same issue with respect to the Legal Services Board. The Bill as it stands puts licensed bodies at a disadvantage when they happen also to come under the jurisdiction of a regulator not covered under the Bill, as will be the case for many of the new alternative business structures. This could have the consequence of increased cost and potentially reduced competition for consumers—the noble Lord, Lord Whitty, please note—which we know well by now the Government are eager to avoid. In short, what makes the amendments desirable is that it is less costly and more appropriate if conflicts can be resolved between the regulators themselves. I beg to move.

Lord Hunt of Wirral: I am very grateful to the Minister. I apologise for failing to give her specific notice. I thought that the warning at Second Reading that I was going to raise this issue was enough, but it was not. I apologise wholeheartedly.
	I am still worried, though, about what she calls the statutory creature. If indeed the clause is limited in the way she has described, the wording should read, "or any other body that has applied to become an approved regulator". The phrase "or any other body" is very wide and open. I have read that the Government have persuaded the Committee, which I am slightly surprised about, given the phraseology. But the Minister has answered my point and promised to reflect on the questions I have asked. In that spirit, I accept what she has said and look forward to hearing further from her.

Lord Kingsland: We now—and at last, some of your Lordships might say—reach Part 5 of the Bill, which deals with alternative business structures. Amendment No. 108 is the first amendment to that part of the Bill. It is a probing amendment. The approach of the amendment is motivated by timing, the key words in the amendment being, "on an incremental basis". This follows from the recommendation of the Joint Committee, chaired by my noble friend Lord Hunt, that there should not be a sudden explosion of ABSs on to the market. They should be introduced gradually. At this stage we therefore urge the Minister to address the concerns that we, and many of those who have taken an interest in this matter, have over-perceived potential problems.
	There is a general uncertainty about what effect these new structures will have on the market. In particular, there is widespread concern about their impact on access to justice. This concern is expressed, most generally, by a fear that the new ABS organisations will cherry pick the most financially attractive areas of law, leaving those that are often subsidised by more attractive work to be either abandoned by high street solicitors or simply dealt with in a perfunctory manner.
	There is also worry about the headline that one has seen more than once in the last few months of one-stop shops or Tesco law. These are portrayed as providing significant benefits to consumers; but we have no idea how that might affect the quality of legal advice given in the one-stop shop. What views do the Government have about that?
	Then there is the international dimension. We are one of the most successful countries in the world at exporting legal services. I have no statistical evidence which would prove the case, but I suspect that we are probably the most successful country in the world at exporting legal services. What effect are the new ABSs going to have on our international reputation? It is very important that whatever we do, it does not damage our ability to sell our services abroad.
	There is another distinct issue about our international outreach. Certain ABS structures might be regarded in other countries as being unethical or indeed be illegal in other territories or jurisdictions. How will we grapple with that problem? There are a range of issues, about which it is still unclear as to the effect that ABSs might have.
	This is a probing amendment. We are probing to ascertain whether the Government have any plans for assessing or monitoring the impact of ABSs once they begin to be licensed and whether they will have any safeguards in place against any of these potential concerns. The amendment is not in itself the answer. We have put forward two or three amendments of our own—more detailed amendments which we hope your Lordships will discuss later. They are different ways of achieving the same objective but our philosophy towards ABSs is an incremental one. We believe that the Government and the Legal Services Board should begin slowly and deliberately and, as a result of accumulating experience should then, if that experience is positive, become more ambitious. But we would be wholly opposed to any immediate licensing system which did not take account of the experience of the first few ABSs that were launched.
	We believe that the Joint Committee said some very wise things about the ABSs and I want to conclude my remarks with a quotation from its report:
	"The true impact of ABS is not clear to us. Evidence has suggested that there may be an impact on both vulnerable consumers and those in particular geographical locations (for example, rural or isolated areas). Indeed, it may be that there are different impacts on those two areas. We have received no concrete evidence that access to justice will either be improved or reduced under ABS arrangements, but we are persuaded by some of the evidence suggesting that the reforms may reduce geographical availability. We consider that ABSs may reduce the number of access points for legal services and we see this as a potential problem. There is clearly an issue here and the only conclusion we are able to draw is that no-one can be sure how it will work out. We recognise that there may be a trade-off between the quality and accessibility of advice—for example a small, high-street solicitor in a rural area may not be able to provide the specialist advice a client requires. We recommend that the Government amends the draft Bill to ensure that the impact of ABSs on access to justice, particularly in rural areas, informs the decision-making process that licensing an ABS firm".
	On one particular, issue the Joint Committee has gone rather further than the incremental approach that I was outlining and has said, in terms, that it has real concerns about the impact of ABSs on the geographical disposition of legal services in England and Wales. I beg to move.

Baroness Ashton of Upholland: An interesting debate has brought together noble Lords across the Committee. It is important that I address the issues as fully as I can.
	The principle behind the amendment, with which everyone who has spoken agrees, is that we need to take a very careful approach to alternative business structures. I do not think it is necessary to impose specific constraints in the Bill, but I want to explain why. That will enable Members of the Committee to think about what we are doing and how it will work in practice so that they can decide what they wish to do beyond this point in the Bill.
	The first thing to remember is that we will be licensing alternative business structures only when the rules are in place. These rules must be compatible with the regulatory objectives and must meet the safeguards in the Bill, but we do not want to rule out allowing them to go ahead if they are ready. If they are ready we can licence them safely—I use that word in the context of the regulatory objectives and safeguards in the Bill.
	I have talked to some Committee Members about whether this could be done slowly or incrementally, but there are real difficulties in how one might physically achieve that without being completely anti-competition, either by going for various sectors or by being unrealistic about constraining geographically the way in which firms, companies and organisations now work, not least because of the internet. It is difficult to see a gradual approach in the sense of trying to limit it geographically, numerically and so forth in that way. However, I agree that we need to do this step by step. The Legal Services Board and the licensing authorities are bound by the regulatory objectives and the firms are bound by the duties in Clauses 88 and 169. The duty is to comply with professional conduct obligations and ensure that non-lawyers do not cause breaches of them.
	The Legal Services Board must judge whether the licensing authority rules are appropriate for regulating the risks raised by firms it intends to licence. Those alternative business structures will emerge only when the regulatory framework exists. We do not think that we can control it artificially, while recognising the points behind what the noble Lord, Lord Kingsland, seeks to achieve.
	The Bill was designed to improve access to justice. The noble Lord, Lord Kingsland, asked about overseas and I mentioned to the Committee before that I have had the privilege of having some meetings with Neelie Kroes who is the Competition Commissioner for the European Union. As I was listening to the Committee, I was reading two of her recent speeches about the importance that competition can play in ensuring access to justice. I will circulate her speech to the jury committee of the European Parliament in November to Members of the Committee because it is interesting in the context of Europe. She is very supportive of many of the ways in which we have sought in this country to develop our services, not just legal services but others as well. She has used us as a model for other countries throughout the European Union. She is an important person in the context of what happens in Europe.
	It will be a requirement on those looking for alternative business structures to think about the rules and regulations that apply in other countries— whether or not they are members of the European Union. We have already mentioned the German BRAK and the way in which we want to ensure that we are not being anti-competitive from the UK perspective. We recognise that businesses that are setting up and wishing to work internationally will find ways of developing their structures appropriately and will make their own decisions about whether to go down this route accordingly. We recognise that that approach will need to be thought about and the Competition Commissioner of the European Union will be keen to see us develop it. If there are issues to do with the European Union, I know that she will be glad for me to raise them with her next time we meet.
	On the specific points made by the noble and learned Lord, Lord Woolf, about access to justice, all of the regulatory objectives must be considered in the licensing of alternative business structure firms, including access to justice. It is possible for conditions to be placed on the alternative business structure firm to ensure that it meets those objectives, providing that that is consistent with those objectives. For example, there may be circumstances where in order to be able to create an alternative business structure a condition might be set that you must continue to do as you do now working in this particular field—legal aid in family cases or whatever. It is possible to do that. Therefore, by putting conditions, one is able to get access to justice. Part and parcel of the way in which the alternative business structures will be put together and allowed is that they must have access to justice as one of the principles under which they will be licensed. It is the regulatory objective full stop.
	The combination of the development of the alternative business structures through the legislation—getting ready with the rules, moving towards the structures, allowing the licences, allowing for conditions and being clear about the regulatory objectives—deals with the concerns that the Committee has about how this measure will operate in practice.

Baroness Ashton of Upholland: There would not be a devastating effect on access to justice. That is the point. I will use my words rather than the noble Lord's. I said that when looking at the objectives in the round, the board would determine the weight to be given. I will try to think of an example, although it is always dangerous because I get run over immediately I try to do that. If an alternative business structure planned to offer high-quality accessible legal services in a particular area, but the firm with which it was working already had one lawyer doing a particular piece of work and the new alternative business structure was not sure whether it wished to incorporate it, the board could do two things. It could say, "No, we will direct you to continue doing that work", or it could say, "Well, two miles down the road someone else of good quality is doing that work, so we won't direct you", because the access to justice has not been adversely affected overall. If you look at it purely from a hierarchical point of view you could argue that you could never allow that one lawyer to cease that work because, in theory, the access to justice from that firm would have been altered. I deliberately chose a hypothetical situation because I wanted to try to explore it. But the idea that there could be any kind of devastating effect would completely run against everything that we have said about the Bill and that we are seeking to achieve. It is really important that the board is able to look at business structures and regulatory objectives in the round, for exactly the reasons that I have given.
	When I send noble Lords Neelie Kroes's speeches they will see that she consistently makes the point that improving competition and access to justice can have a really positive effect. Those objectives can be interrelated in many circumstances—and that is very important, too.
	It is right and proper for noble Lords to be concerned that when alternative business structures are set up something does not get lost. For the noble and learned Lord, the idea that people would lose out in getting justice is horrendous. I agree with him completely; that would be absolutely detrimental. But in the example I have just given, you would have to look at it in the context of what is happening in that area and where else people would be able to get those services. If for 99.9 per cent of the population in a particular area there were better and broader services, of higher quality and with better investment, and it could be demonstrated that for the 0.1 per cent an alternative way had been found—either by direction or in another way—everyone would be perfectly comfortable with that.
	Noble Lords are absolutely right to say that in designing the rules, building up to the licensing authorities and enabling people to be licensed, we must ensure that these objectives operate properly and are not overridden completely in a way that noble Lords are worried about. I am treating this debate as my chance to explore these issues, as noble Lords would expect, and to ensure that we have got this completely right. I am beginning to think, too, that we must make sure that we see what happens and how the board does what it does, and I shall be giving feedback to my honourable friend Bridget Prentice and my noble and learned friend the Lord Chancellor in that regard. These are not necessarily issues to put in the Bill, but they are ones to explore properly and make sure that we get right.
	The principle is to ensure that people do not just cherry pick and that if services start to deteriorate or become nonexistent in particular areas either there can be direction or it will be agreed not to give the alternative business structure approval. We want to ensure that firms are operating in the right and appropriate way to meet all the objectives while recognising that they are to be taken in the round and weighed for their advantages and disadvantages before making a decision. We need to be crystal clear that there could not be circumstances in which there was a devastating effect on access to justice.

Lord Thomas of Gresford: The Minister told us that the alternative business structures, as set out in the Bill, are to achieve the regulatory objectives set out in Clause 1(1)(a) to (g). At Second Reading, the noble and learned Lord the Lord Chancellor said:
	"I move from regulation to alternative business structures. Part 5 provides a means of increasing competition and choice for the consumer".
	Looking at the regulatory objectives, we see that that answers paragraphs (c) and (d). He went on:
	"Companies and firms will now be permitted to have different types of lawyers and non-lawyers working together on an equal footing and will be able to do so with the benefit of external investment".—[Official Report, 6/12/06; col. 1165.]
	Those are the pros of Part 5. It does nothing to support the constitutional principle of the rule of law. As the noble and learned Lord, Lord Woolf, said in a pointed intervention, it does nothing to improve access to justice. It certainly does not encourage an independent, strong, diverse and effective legal profession but the reverse. As for increasing public understanding of citizens' legal rights and duties, it does nothing. Promoting and maintaining adherence to the professional principles? Nothing. From what the noble and learned Lord the Lord Chancellor said about the regulatory objectives we can see that the balance is against the proposal.
	We considered at length how best to improve Part 5 as a whole and concluded that nothing would do so. Unless you accept the principle of alternative business structures as a good thing in itself—we do not—the only thing is to have a stand part debate for every clause in Part 5. That is the reason for the lengthy and complicated stand part group on today's Marshalled List.
	One must then consider the other side. The Minister said at Second Reading that the Bill provided robust safeguards to protect the consumer—but from what? The answer is a diminution in the service that the legal profession now gives to the consumer. I am glad to see that the noble Lord, Lord Whitty, is back in his place because he will tell us why, in principle, he supports the Bill. How he can do that as the lone voice of the consumer, as I have previously said, when it is clearly contrary to the consumer interest to have the high street devoid of the legal firms that serve it at the moment, I do not know. How he can do that when the reverse of competition will create monopolies and when competition will not produce the lowering of fees that he, no doubt, looks for, I do not understand.
	It may be that the de Nederlandsche Bank will wish to co-operate in this country in legal practices—we have the Dutch connection that the Minister was telling us about—but how does that bank or any bank, insurance company, supermarket chain or motoring organisation know where it is best to provide legal services? This is a big issue, and the Minister has told us that she will think about it. What is the situation? When it is considering licensing, will the Legal Services Board look round the country and say, "That's quite a good place for an alternative business structure. We will invite people to apply for that area", or will the alternative business structure come forward with an assessment of a place—shall we say in my part of Wales, north-east Wales—and present to the Government its assessment of the need for it to add a legal element or firm to its bank, insurance company or supermarket?
	What will happen? I have been involved in the small high street firm, and I know that high street firms will no longer be able to compete, so they will close down. When they do that, the fees of the large firms that come in will go up. It is classic competition. I remember that, in my early days as a solicitor, the banks used to offer a trustee service. They would then go to local solicitors and ask them to act on their behalf, which they did. The fees charged by the trustee services of the various banks were far in excess of what high street firms charged. As for usability, how many of us are able to talk to a bank manager in the bank? The Minister is indicating that she can, and she is very lucky. She will have to tell me his name—she will tell me the name of her bank in a minute. In most cases, the manager is somewhere in the country on the end of the phone and inquiries go in all directions. We miss and lack personal involvement with a local solicitor. It is sometimes said that such people have limited expertise, but they have direct access through the legal system of this country—not that of Europe, the Netherlands or wherever else—to the leading people in their field for whatever problem crops up.
	I mentioned at Second Reading that, as an articled clerk, I had instructed Lord Elwyn-Jones leading the noble Lord, Lord Hooson. I recall on another occasion—this was on the high street—instructing the noble and learned Lord, Lord Lloyd of Berwick, on a commercial case that happened to crop up. Such cases did not crop up very often but, when they did, we had access to the very best of advice. How is this alternative business structure capable of replacing a system like that by adding on to the banks, insurance companies, motoring organisations and commercial retail firms to which the noble Baroness referred an office for legal services? They are bound to cherry pick, and they are bound not to carry out the community services that we used to do for nothing. I do not believe that it is in the consumer interest for that to happen. It may perhaps be in the interests of the lawyer who wants to sell out and get some capital, but it is not in the consumer interest at all. You also have to consider the professional problems—clause after clause of the Bill seeks to address them—of confidentiality, of legal professional privilege and, specifically, of conflict of interest in a firm that has other interests that go well beyond the interests of the particular client.
	I said yesterday and I repeat it today: the Bill is fuelled by the Consumer Council, which sees the LSB as an extension of the Consumer Council. It should not be that way. It is dealing with professional organisations with a long history. It may be that the Law Society has fallen down in one aspect, that of dealing with complaints, in the past few years—it did not used to, but it has recently—but that is not a good enough reason, nor is it in the consumer interests, wholly to throw the legal profession of this country into disarray, to put people out of business and to introduce the alternative business structure that Part 5 provides for. A better service? I do not believe it. A cheaper service? I do not see it.
	The Committee will gather that I should declare an interest as a lawyer, but—this is the point that I make—I am at the end of my career. I heard some noble Lords say, "No, no", and I hope that more people will say that. I have no personal interest in this continuing, but I have a deep feeling for the needs of the legal profession and a deep understanding of how it has served the community of this country. There have been areas where it has fallen down but, compared with the way in which the legal profession of this country represents people, both in this community and in the international community, those setbacks are as nothing. So, without making a further Second Reading speech, I oppose Clause 70.

Lord Whitty: It is part of the present structure that that aspect of, for example, buying a house is, theoretically, a national competition. But the noble Lord is almost contradicting his own arguments, because in practice the people of that small town will probably go to one of their local high street solicitors. There is already competition among solicitors and estate agents. Equally, there would be competition among multidisciplinary ABSs. That is the essence of this issue: the service that solicitors provide ought to be available in many different forms and in combination with other services.
	As I was hinting in my intervention on an earlier amendment, there may be areas where that degree of competition could not possibly survive. In the remoter rural areas and very small towns, I suspect that would be a problem. For that reason, assessment and monitoring by the regulator of the effects of introducing these alternative business structures would be a valuable addition to the Bill, at least in terms of Government commitment if it is not a legislative matter. That would be an important aspect. For the vast bulk of people, though, it must be better that the range of services that they normally need in any complex legal transaction could be made available in one place. If they do not like it, they can go back to dealing with the estate agent and the solicitor elsewhere.
	I said earlier to the noble Lord, Lord Campbell of Alloway—sotto voce, so it is probably not in Hansard—that some of my best friends are lawyers. Rather fewer are estate agents. Among the lawyers I occasionally see, and I had better not name them, there is quite a keenness for developing new and creative ways of providing their service and new partnerships with other professionals in their locality or sphere of specialism. At the moment, the whole structure inhibits such creativity and the growth of alternative services in that respect.
	That is why, in principle, for the bulk of consumers there would be an improvement in the services offered. There would almost certainly be an improvement in the price and the value for money of those services. There needs to be some protection for those areas of the country and those particular specialisms that might be adversely affected; they should probably be provided for. In principle, this change must be a good thing, and I therefore strongly oppose any move to exclude these clauses from the Bill.

Baroness Ashton of Upholland: We created alternative business structures under Section 66 of the Courts and Legal Services Act 1990. What prevents many of the manifestations of those structures coming into place is the lack of rules and regulators. Removing this entire part of the Bill does not remove alternative business structures, it simply removes an opportunity to create the structures in the way that we have designed them.
	I reiterate that it is important we do not set ourselves up in your Lordships' House as being either the consumer or not the consumer. I do not believe that in any of our constructive discussions my noble friend Lord Whitty has been the only voice of the consumer. Indeed, many noble Lords have been at pains to point out that, although they may or may not come from the legal profession, they are here to represent their views in the context of either having been a consumer, that they are a consumer, or that they serve a consumer. I am a bit saddened that once again the noble Lord, Lord Thomas of Gresford, refers to my noble friend as the "lone voice of the consumer", especially considering the party from which the noble Lord comes. I have huge respect for the Liberal Democrat party. I have worked closely with the party over the years and one of the things I believed it felt most passionately about until today, was that it represented the consumer interest, both in the context—

Lord Hunt of Wirral: The noble Lord, Lord Campbell-Savours, raised an important point. The whole question of pilot schemes greatly exercised the Joint Committee and we did not reach a firm conclusion, but it is worth reflecting for a moment whether it might present a way forward. The Minister is right that it is difficult to decide how to structure a pilot scheme. Earlier in our deliberations today the Minister said, "Who will be the lucky ones who will get those opportunities to demonstrate how alternative business structures can proceed?", but that is probably the wrong way to look at this.
	We had a vigorous debate about pilot schemes on home improvement packs and I engaged in quite a lengthy debate with the Minister's ministerial colleague, the noble Lord, Lord Rooker. We had quite a problem about geographical area and whether the scheme would be voluntary or compulsory. The noble Baroness, Lady Andrews, recently decided that the issue was probably a little more on the backburner now because we have been exploring how it could be introduced and it gets more and more difficult.
	However, I also advocated pilot schemes for conditional fee agreements. On reflection, if we had had pilot schemes for conditional fee agreements we might have avoided some of the very serious problems that have arisen. The great advantage of pilot schemes is that you can in a location or particular area look at the effect that a whole new system is going to have. As the noble and learned Lord, Lord Woolf, said earlier, you could have a pilot scheme—although I am not suggesting that Wales, in particular, would be a good idea for a pilot scheme on alternative business structures—in central or north Wales or, indeed, some part of England. You could take a region and see what effect alternative business structures would have. Although the Joint Select Committee did not reach a clear view, I hope that the Minister has not ruled it out. We are all determined to try to make this a success but we need to test the water.
	Earlier the Minister was musing on whether she was in favour of evolution or revolution. I have never seen her as a revolutionary. I think that she is much more in favour of evolution. My noble friend referred previously to an incremental approach. There must be a better way in which to test this new concept; even if we do not go back to Sir David Clementi's ideas of starting with LDPs, we should at least test the water first.

Baroness Ashton of Upholland: I am grateful to the noble Lord for putting forward those propositions. LDPs come into force when the Bill is passed, so we will have the benefit of them in any event. The difficulty of piloting, if it were desirable—and no one has yet solved this problem—is with the assumption that the provision of legal services is on a strictly geographical basis—in the north of England or central Wales, for example—when services are not necessarily provided in that way. We do not have localities in the same way as we did; services are provided by the internet and other means across the country. The local high street solicitor might be a fabulous idea, like the sound of the ball on the willow bat, but the situation has moved on in many cases—and that is very difficult to constrain.
	By doing as noble Lords suggest, we might end up enabling in a particular locality something that could be construed—although I have not tested this yet and merely make the proposition—as a very anti-competitive measure. We would have to select the first 20 companies or a group of companies operating in a certain locality that could create new structures and operate on that basis, offering different kinds of services. But in the next town, or five miles up the road or 200 yards up the road, there would be companies that could not do that. That is my difficulty with the proposal.
	I have tried to approach the suggestion that the process should be incremental by looking at it in the context of ensuring when it is set up it is right. Although I know that the noble Lord has quite reasonably raised issues about conditional fee agreements—and I have considered them—this is a different issue. It is right and proper to think about lessons learnt from setting up different aspects up of a regulatory framework and we have to ensure that we get it right. But that is how I would go with the opportunity to monitor. Perhaps we can think further about that.

Lord Lyell of Markyate: I am extremely grateful to be able to intervene, because in a sense I am a latecomer to this debate—although I must say that noble Lords all look very nice on the monitor.
	I want to throw in one aspect that ties in with what the noble Lord, Lord Whitty, was saying. We should not be frightened of competition. I do not think that the providers of legal services have ever had need to be frightened of competition. We have seen an extraordinary amount of change in the past 20 years. It is not at all territorial—I can think of lawyers going from respected firms in London to live in Scotland, who continue to give highly specialised employment law advice. I know that schools with which I am associated take advice on employment issues from people who are not lawyers and that accountants and lawyers already work together. My point is that we should not be frightened of competition. Whatever we do to be cautious and protect from bad developments, we must be careful not to over-regulate. What we expect from lawyers, wherever they are and whoever they are associated with in partnership, is that they are properly trained, that they keep up to date and that they maintain the high professional standards that we expect from all parts of the profession. If we achieve that, we will have gone a long way.

Baroness Ashton of Upholland: The proposal that the AA should be given an advantage—which is certainly how it would be perceived by other organisations, not least the RAC—creates enormous difficulties. It is right that they are enthusiastic; the Law Society equally so. I hope I am right in saying that; I think I am. The Government cannot pick individual organisations and give them what could and would be seen in the world of business as a competitive edge. That is a fundamental difficulty with the noble Lord's suggestion. Again, I return to the approach that I have tried to propose: to make sure that we have got this right, we must be absolutely clear. Could the licensing authorities look at, and perhaps model, what could potentially happen?
	That modelling process might mean that one is able to reconcile. I understand the noble Lord's desire for piloting, to make sure that we know what the consequences might be. Again, that is something we can think about. This is not going to come in tomorrow. It is an important and potentially exciting business opportunity for the legal professions, with great consumer benefits. We have to make sure that the potential for any detriment is negated by the way in which it is set up. The noble Lord knows that I am open to, and willing to talk about, all sorts of proposals. Nobody has yet found a proposal that I think is better than the one I have put forward. Simply, it would be wholly inappropriate and wrong to pick a few companies and give them, and nobody else, the chance to do this. We would be unable to do it. We would find ourselves in grave difficulties.

Baroness Ashton of Upholland: Unsurprisingly, I am not inclined to accept this amendment. I want to explain the basis on which we have organised how firms will be regulated. The principle behind the amendment is that legal practices could offer partnership or equivalent status to non-lawyers who work internally within the business—such as IT or human resources directors—and would not need to be licensed as an alternative business structure.
	In the alternative business structures discussed by Sir David Clementi in Chapter F of his report, a firm of this type is a legal disciplinary partner practice. Non-lawyers could become partners or directors, but for the purposes of assisting the business in the development of legal services. I know that there is widespread interest among existing firms in adapting their management structures in this way, as the noble and learned Lord referred to. I would not be surprised if this arrangement were one of the first to emerge under the new alternative business structure licensing arrangements. But I am not persuaded to exclude them altogether from Part 5.
	The safeguards within the Bill take a flexible approach to new opportunities for practices owned and managed by different combinations of lawyers. We have provided that firms with small numbers of non-lawyer managers can qualify as what we have called low-risk bodies, under Clause 106. This provision was created with exactly this type of arrangement in mind.
	I am not sure that by exempting them I could be confident that we had any form of regulation over the managers in question. In particular, we need to make sure that there is proper protection for legal services, which in an alternative business structure is the function of the head of legal practice. In principle, I entirely agree that non-lawyer managers can make a real contribution. In most cases their influence is a positive one. Yet as managers they are in an undeniably important position to influence the business, as head of resources or head of business development. It is for that reason that Sir David Clementi recommended that they should be properly accountable to the regulator. As a function of Part 5 of the Bill, if a firm is a licensed body all people in positions of control, whether lawyers or not, are subject to this supervision, bound by specific statutory duties and sanctioned for non-compliance. These safeguards should apply to all managers whether they provide services to consumers or not.
	We cannot necessarily make a realistic distinction between these cases. Being a partner or director in a firm brings with it influence and responsibility. Where legal services are concerned, it is right that anyone in a position of great influence should be effectively regulated. Effective regulation in Part 5 may be applied flexibly in practice. The provisions in the Bill for low-risk bodies strike the right balance, so I ask that the amendment be withdrawn.

Lord Hunt of Wirral: The Minister is quoting Sir David Clementi, and particularly Part F of his report. Yet he did not recommend the alternative business structures that we are now talking about—far from it. Therefore, I do not see that the noble Baroness can really plead Sir David's recommendations in support of what she is now proposing. Obviously, I wait to hear the reaction of my noble friend, but I wonder whether the Minister appreciates the fact that, within a law firm, the head of human resources is the head of human resources. He or she has all the power and influence of being head of HR, and the same applies to the heads of IT and finance and so on.
	We are talking about an artificial structure in which those people are currently prevented from being partners in a practice. There may be only one such partner in a 200-partner practice, but at the moment they are restricted by not being allowed to become partners or part-owners. It most cases, they would play a very small role and their influence would not really increase, but this artificial barrier would be removed. In these amendments, the City of London Law Society is seeking to ensure that this small change does not immediately result in the full panoply of alternative business structures.

Baroness Ashton of Upholland: I was not trying to be motherhood and apple pie, not least because I do not like apple pie. I was trying to say that if one has that scenario, and we accept that there is a person of great influence, we have set out in the Bill a framework that says one can do it in a low-risk way. We will have to think about and work through the detail. I am happy to write to the noble and learned Lord and explain further from my honourable friend who has the policy responsibility what that might look like. The fundamental principle that I am trying to establish at this point is that it is about low risk. We are not suggesting that this is a high risk situation, but one cannot think that there could never be circumstances—that is the point I was trying to reach with the bit about motherhood—where that individual could not have a huge impact on that firm.

Lord Kingsland: The noble Baroness will not be surprised to hear that I am disappointed by her reply. This is a situation in which the individual in question is providing exclusively internal services to his or her firm and there is no question of that person providing any services to the clients of the firm. It seems that the logic that lies behind Part 5 and the alternative business structures does not have any application to the amendment that the City of London Law Society wanted to see advanced in the course of Committee stage. Nevertheless, the noble Baroness has been clear in her opposition to what the amendment seeks to achieve. In those circumstances, I shall have to go away and consider the matter.